Nate Breindel is one busy student. In addition to completing his last semester at Washington University in St. Louis with a major in marketing and psychology, he also owns and operates his .
“It’s especially difficult when you have three stores. There’s a lot going on. But I wouldn’t trade the experience for anything,” says Breindel.
The undergrad decided early on that he would rather work for himself than someone else. He opened his first on-campus store, called Nate’s Place, in August 2000. The store provides students with an array of services, including cellular telephones, test preparation and travel-arrangement services and computer repair.
Breindel came up with the idea for a student-focused store after he went to a nearby mall to buy a cell phone. He was upset with the service and soon realized that most students would rather go to an on-campus store geared toward their needs than drive several miles to a nearby mall.
“This is a platform for student-oriented services. We can add and take out,” says Breindel. He not only added services. He added stores. Breindel now operates three stores and employs seven part-time employees. In addition to the first store, he also operates a store at St. Louis University and the University of Missouri-St. Louis.
“With any luck, we’ll have five more next year,” says Breindel, who plans to continue the business after graduation. “I see the large state schools as the most lucrative. I think there eventually could be 350 Nate’s Place stores across the country.”
A Good Alternative
Starting a business now, while the job market is lousy, may be a good alternative to finding employment. At first glance, though, it might seem especially risky with the economy still in the doldrums. But Breindel may be on to something. Over the years, college-age students have started some of the largest and most successful companies. At the age of 17, Fred Deluca borrowed money from a friend and started Subway Restaurants. Paul Orfalea leased a garage, rented a copy machine and launched Kinko’s.
And now actually may be a good time to start a company, says Kenneth Harrington, professor of entrepreneurship program at his school triple in size since the year 2000. Breindel is just one of 450 students in the program this year.at Washington University. Harrington has seen the
“If you find the right opportunity where you can make high margins and high growth and cover your capital needs, it’s possible that these types of businesses can get started without support financially in good times and bad times,” says Harrington.
But how do you go about finding the right opportunity? Harrington says the first and possibly the most important step is creating the idea. Think about major societal trends.
Next, look for pain. Harrington says it’s important to notice things that bother you. “If you see a major trend and see some things around that trend that are causing pain or not working well, then that creates an opportunity,” he says.
Who Will Buy and Why?
Once an opportunity is identified, ask questions to find out if the idea is promising. Who would get the most value of any offering? How much is that person willing to pay? How would you sell or distribute the product or service? “What we want to do is identify whether the opportunity is really real,” says Harrington.
If you still think the idea is promising, the next step is team formation. Decide what kind of team is needed to implement the business. What kinds of skills are needed? Who would play what role? What legal structure would be most appropriate? These questions help the entrepreneur to imagine what the business would look like.
Now comes the hard part: raising the necessary funds to get started. Since most college-age students would have problems raising money for a new venture, you may want to consider the bootstrap approach to entrepreneurship, which means starting a business with very little money.
“If you bootstrap, [your] idea has to be valuable enough for you to get the customer to give you high enough gross margins or terms on your offering, in terms of paying you early or paying you for your effort as you create your product. The value has to be high enough that they, in fact, are funding your business,” says Harrington.
He continues: “You could have a mediocre idea, execute flawlessly and be successful. But the probability to have an undergraduate execute flawlessly is low. Therefore, the opportunity has to be right, or we would recommend you not pursue it.”
A lack of family responsibilities is another reason why undergrads may want to consider starting a business, says Caron St. John, director of the Spiro Center for Entrepreneurial Leadership at Clemson University in South Carolina. “It’s not as much risk for them to try to start a business as it would be for someone with a family and other obligations,” she says.
The key to, according to St. John, is the student entrepreneur’s willingness to rely on others with experience. “If they’re willing to work with people who have experience in developing new businesses and launching them, then I think they’re much more likely to be successful than someone who wants to do it completely on their own.”
Help From Friends
Many students she works with are good at enlisting the free assistance of friends and family, she adds. “Often they enlist the support of others to give them time. That’s a wonderful source of bootstrap funds,” says St. John. “That goes beyond the ability to recognize an opportunity.”
Adam Witty, a marketing major at Clemson University, enlisted his friends and family to help him start a business. Witty launched TicketAdvantage in the fall of 2001 with the financial backing from his father and help from friends.
TicketAdvantage is an online secondary-market ticket exchange that allows season-ticket holders to sell their unused tickets. Witty spent about a year building the infrastructure of the business before launching it.
He says his biggest problem is skepticism from the business community. “It’s probably a little bit harder to get the attention and the respect of companies that you are trying to work with, because a lot of people think we’re just stupid kids,” he says.
Witty plans to continue the business after graduation and hopes it will eventually support him and the friends who are working with him. He advises other students who want to start businesses to follow their dreams.
“If you do have an idea, develop it, and if the pieces fit together, start a business,” he says. “Starting a business in school is a great opportunity. If you can get it going, then when you graduate, you won’t have to work for someone else.”